HOME SERVICE FREEDOM
THIS MEMBERSHIP AGREEMENT (the “Agreement”), with an effective date of November, 1st 2023 (the “Effective Date”) is entered into by and between Freedom For the Trades, LLC, with its principal place of business located at 3230 E Broadway Road, Suite B115 Phoenix, AZ 85040 (the “Company”) and the member(the “Member”).
WHEREAS, Company provides proprietary business development services including, but not limited to, sales, marketing, advertising and operations training services in addition to buying group and fleet management services (the “Program”) to Members of Home Service Freedom, LLC, which operates membership based affinity groups serving its Members in the residential home service and commercial services industry; and
WHEREAS, Company Member or Members (the “Member” or altogether the “Members”) is a business and their affiliates and subsidiaries who operate businesses that provide residential and commercial repair and replacement services in the United States of America and Canada and are eligible to participate in and use the Program; and
WHEREAS, both Company and Member enter into this Agreement in order to allow Member to participate in the Program
NOW, THEREFORE, in consideration of the mutual commitments and the covenants in this Agreement, and for other mutual good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows.
- Affinity Group
- Subject Matter. This Agreement and its Program are specific to services in the Home Services Industry. Company, both directly and indirectly, including using affiliates, subsidiaries, operating entities and assumed names, offers similar programs to a variety of affinity groups in the residential home service and commercial services industry.
- Single Entity; Identification. This Agreement has been entered into by Company with Member in reliance upon Member’s current corporate legal structure, ownership, and control, as set forth in Appendix A (the “Member Identification”).
- Ownership and Control. Member must notify Company in writing no longer than 10 calendar days following any changes, directly or indirectly, intentionally or otherwise, to Member’s corporate legal structure, ownership structure, or the control of Member and Company. Furthermore, Company has the right to terminate this Agreement, in its sole discretion, following Members’ ownership change.
- No Transfer. Member may not transfer or assign this Agreement or any right or obligation of Member under this Agreement without the prior written consent of Company, except as otherwise permitted by Section 2.b., above.
- Multiple Branches; Authorized Locations. In order for Company to establish and maintain an effective affinity group, Member agrees that it shall conduct all of its operations under this Agreement only in and from the location(s) designated in Appendix B (the “Authorized Locations”). Member must notify Company in writing no longer than 10 calendars days of any changes, additions, deletions or consolidations to Member locations outlined in Appendix B. All locations in Appendix B shall be owned and operated by the Member. Member understands and agrees that in certain instances, notwithstanding shared ownership or corporate entities, Company may require separate Membership Agreements for separate locations where such locations operate independently and without the benefit of shared operational economies of scale.
- Limitation of Affinity Group Size. In order for Company to establish and maintain an effective affinity group, Member agrees that Company reserves the right to limit the number of Members within an affinity group. Company, in its sole discretion and as subject to change, may set membership limits using parameters of its choosing, including population size according to various geographic boundaries or prospective market size according to various geographic boundaries.
- Buying Group Exclusivity, Reporting and Eligibility. During the Term, Member agrees that its purchases from participating Company Buying Group vendors will be used, by Company and its affiliates including Freedom For the Trades, LLC, to negotiate improved pricing or rebates for all Members. Member agrees to accurately report their purchases from Buying Group vendors on a monthly or quarterly basis as determined by the Company and in the format required by the Company in order to be eligible for Company rebate payments to Member. Member is not required to purchase from Company Buying Group vendors but are encouraged to support Company Buying Group vendors for the collective benefit of all Members. Member may participate with other Buying Groups in the residential home service and commercial services industry; however, Member is required to report their purchases from the Company Buying Group vendors only to the Company Buying Group and no other Buying Group. A “Buying Group” shall mean a buying group, group purchasing organization, or other similar entity, that leverages the purchasing power of a group of participating individuals and/or businesses for the purpose of securing preferred pricing, rebates or other terms from vendors based on the collective buying power of the participating individuals and/or businesses. Member must be in good credit standing as determined solely by the Company to be eligible for rebate payments. Member is not eligible for rebate payments following the termination date of this agreement.
- Company’s & Member’s Obligations
- Company Obligations. Company shall provide Member with access to the Program including discounted pricing or rebates on products and services, as well as best practices business development, sales and operations training and other valuable consideration, for use exclusively by Member. Company and its affiliates and subsidiaries shall maintain contractual relationships with vendors and service providers for purposes of providing such Program benefits to Members. Company reserves the right to enter into agreements with Vendors at its sole discretion to facilitate Program benefits to Members.
- Member Obligations; Code of Conduct. To facilitate the relationship, Member shall comply with the obligations and purpose of this Agreement, including timely and accurate reporting obligations, in order for Company to negotiate discounted pricing or rebates on products, services, training and other Program offerings. Member agrees further that it shall conduct itself in a manner consistent with the Code of Conduct outlined in Appendix D (the “Code of Conduct”), as Company in its sole discretion may amend from time to time.
- Term and Termination
- The term of this Agreement is one (1) year from the Effective Date, unless terminated sooner according to the terms of this Agreement (the “Term”).
- Automatic Renewal. Upon the conclusion of any term, this Agreement shall automatically renew for a successive one (1) year term, unless or until terminated sooner according to the terms of this Agreement.
- Member’s Right to Terminate. Member may prevent the automatic renewal of this Agreement by delivering to Company a written notice of intent not to renew at least 90 days before the end of any renewal term. Member may terminate this Agreement for any reason by delivering to Company a written notice of intent to terminate at least 90 days before the effective date of termination.
- Company’s Right to Terminate. Company reserves the right to terminate this Agreement upon thirty (30) days written notice to Member if, in Company’s sole discretion, Member fails to perform its duties under this Agreement, including any breach of the terms of this Agreement or any violation of the Code of Conduct by Member. Company reserves the right to terminate this Agreement immediately upon written notice to Member for the following occurrences: (i) past due account; (ii) competing with Home Service Freedom, LLC or its affiliates; (iii) Member’s bankruptcy; (iv) fraud; (v) unresponsiveness to repeated Company communications; (vi) criminal conviction of Member owner.
- Membership Fees
- Initial Fee. Member agrees to pay to Company a non-refundable initial fee of five thousand dollars ($5,000) USD (the “Initial Fee”). For purposes of clarity, the Initial Fee is non-refundable, including in instances of a termination of this Agreement by either Member or Company.
- Membership Fee. Member agrees to pay to Company a monthly fee of one thousand five hundred dollars ($1,500) USD (the “Membership Fee”). The monthly Membership Fee is due to no later than 5th day of each month. Company reserves the right to change the Membership Fee on the first business day in January and the first business day in July of each year. Company will advise Member at least 90 days in advance of any change to the Membership Fee.
- Method of Payment. Member may pay the Initial Fee and Monthly fee by credit card, utilizing automatic withdrawals according to the payment information contained in Appendix E (the “Method of Payment”).
- Late Payment. In the case of any Initial Fee payment or Membership Fee payment that remains unpaid more than 48 hours after it was otherwise due, Member agrees to pay Company an additional five percent (5%) of the amount due and owing, as a late payment charge.
- Purchasing Program and Rebates
- Participant Lists. Member agrees that Company may share all relevant information about Member with Company Buying Group vendors in order to facilitate the Program, including allowing relevant parties to identify the other as a participant in Company’s affinity group. Member’s use or and access to a list of other Members is subject to the Confidentiality provision of this Agreement.
- Discounted Pricing. When a Company Buying Group vendor elects to offer discounted pricing to Members through the Program, Members shall have access to such discounted pricing through the Company website. Members are permitted to engage with Company Buying Group vendors for purposes of directly negotiating pricing for products or services, or to continue using any previously negotiated pricing for products or services, subject to the Buying Group Exclusivity, Reporting and Eligibility requirements of this Agreement, including the promise by Member that all such purchasing by Member related to the Garage Door Replacement, Repair and Maintenance area of the residential home service and commercial services industry is reported as purchased under the Program in this Agreement during its Term.
- Rebates. When a Company Buying Group vendor offers rebates to Members through the Program, Members shall have access to such rebates through the Company website. Company Buying Group vendors shall remit all rebates directly to Company, and Company shall remit to Member its share of all such rebates according to the terms of this Agreement.
- No Distribution or Resale by Company
- Sales and Services. Member agrees that it shall make all reasonable efforts to purchase from Company Buying Group vendors. All member purchases from Company Buying Group vendors shall be made directly by Member with Company Buying Group vendor. Member understands they may determine which vendors to use in their business and may negotiate pricing with vendors which may be better than prices in the Program. In either case, Members’ purchases shall be used to negotiate volume rebates with current and future Company Buying Group vendors. Any monies owed by Member to a Company Buying Group vendor shall be the sole responsibility of Member. Member understands and agrees that Company is not a distributor or reseller of products or services offered by Company Buying Group vendors.
- Independent Parties. Company and Member shall at all times be independent parties. Neither party is an employee, joint venture, franchisee, franchisor, joint employer, agent, partner, or similar, of the other. Neither party is authorized to assume or create any obligations or liabilities, express or implied, on behalf of or in the name of the other. The employees, methods, facilities, and equipment of each Member and Company shall at all times be under the exclusive direction and control of that party.
- Member Reporting – Key Performance Indicators (“KPIs”)
- Content and Timing. On or before Monday at 12:00 p.m. Central Time of each week, or on or before the 5th day following each calendar month, or on or before the 5th day following each calendar quarter, depending on the applicable reporting interval, Member agrees to submit to Company, in the form and format set forth in this Agreement, a report of Member KPIs as determined by the Company for use by the Company to facilitate the Program, as set forth in Appendix F (the “Member Reporting Requirements”). Private and public group KPI dashboards will be produced and distributed exclusively to a Member and/or, upon the Members’ written permission, publicly to all Members. Member reporting of KPIs is required to properly monitor and evaluate Member’s use of Company services and Company Buying Group vendors. Examples of KPIs are shown in Appendix C (the “Key Performance Indicators”).
- Member acknowledges that the Company membership list is confidential and intended to be used exclusively by Company to facilitate the Program. If Member receives the Company membership list, Member further commits to protect the Company membership list by not redistributing the membership list to any third party. Member agrees to use the Company membership list only to facilitate best practices networking relationships with other willing Members. Member agrees not to use the Company membership list to solicit any products or services to Company Members or to solicit any partnership, merger, sale or acquisition proposals. Member must advise Company in writing that Member approves of Company including Member KPIs in public group KPI dashboards. Member agrees to keep public group KPI dashboards it receives from Company and or from any other source confidential and further agrees to use the data in public group KPI dashboards to manage their business only and for no other purpose. Company is not responsible for Members’ misuse of public group KPI dashboards.
- Member Reporting – Rebates
- Content and Timing. On or before the 5th day of each calendar month, or on or before the 5th day of each calendar quarter, depending on the applicable reporting interval, Member agrees to submit to Company, in the form and format set forth in this Agreement, a report of Member purchases during the applicable reporting interval, from Company Buying Group vendors (the “Monthly/Quarterly Report”). The Monthly/Quarterly report shall include any and all sales or services invoiced by a Company Buying Group vendor to Member. See Appendix F for Member reporting requirements.
- Form and Format. Subject to change by the Company, Member shall submit each Monthly or Quarterly Report to Company in the format Company requires. See Appendix F for Member reporting requirements
- Reporting Discrepancies. If Member’s Monthly or Quarterly reported purchases from Company Buying Group vendors’ differ by five (5) percent or more from Company Buying Group vendors’ reported sales to Members, Company shall report the discrepancy to both Member and Company Buying Group vendor for discrepancy resolution between Member and Company Buying Group vendor. In any case where Company notifies Member of a discrepancy, Member shall promptly communicate with the Company Buying Group vendor to resolve the discrepancy and submit a revised confirmation report with previously submitted or revised purchasing values to Company within ten (10) calendar days after receiving such notice. If any discrepancy remains unresolved 30 days after the original date that Company notified Member of a discrepancy, Company has the right, in its sole discretion, to unilaterally resolve the reporting discrepancy. Members are required to report the total gross value of all invoices less freight, taxes and handling charges and not the value of purchase orders issued during the applicable reporting period. Vendor invoices issued during a reporting period will most closely match Company Buying Group vendors’ reported sales in the reporting period.
- Rebate Payments
- Timing. Company targeted date to pay Member rebates received from Company Buying Group vendors pursuant to this Agreement is 45 days following the close of the calendar month or calendar quarter. Target payment dates are the 15th of the second month following the close of each calendar month for monthly payments and the 15th of May, August, November and February respectively for calendar quarterly payments. Such payments may be issued to Members by check or credited to Member’s account with Company to offset future Membership fees and or Initial Fees.
- Rebate Payment Subject to Reporting. Member is required to report purchases from Company Buying Group vendors as outlined in the Timing section above to be eligible for rebate payments from Company. Company shall not be responsible for collection nor obligated to pay a Member any rebate payment under this Agreement, in whole or in part, for any month or quarter in which Member does not report purchases in accordance with the Timing section above. Member permanently forfeits rebate payments for any month or quarter in which a Member does not submit purchases as outlined in the Timing section above.
- Rebate Payment Subject to Being Current. Company shall not owe Member any rebate payment under this Agreement, in whole or in part, if Member remains due and or outstanding for any monies owed by Member to Company for any reason, by the 10th calendar day of the month. Member agrees that in such a case, Company may apply such rebate payment, in whole or in part, as a credit against such monies owed. Member agrees that in such a case, any rebate payment amount remaining after such credit is applied, is permanently forfeited by Member.
- Optional Crediting of Rebate Payments. At Member’s request and at Company’s approval, Member may elect to have rebate payments applied to their account with the Company resulting in a credit against future Member payments to Company pursuant to this Agreement, including any future Membership Fees due or any monthly payment of the Initial Fee due. Member shall indicate its requested election utilizing Appendix E and have the right to change requested elections once in any twelve (12) month period, following the effective date of this agreement.
- Payment Method. Company will pay Rebates to Members in accordance with the Company approved Member requested elections in Appendix E if a Member is in good credit standing with the Company, in the Company’s sole discretion, and if the Member has met the reporting requirements under Section 10.a., Timing, above.
- Confidentiality Required. Under no circumstances, unless required by law, shall Member disclose any Confidential Information to anyone, including but not limited to Member’s customers or perspective customers, vendors or competitors, without the express written consent from an executive of Company. Member shall not use any Confidential Information to compete with Company, its affiliates, or other Members. Member acknowledges that improper disclosure or misuse of Confidential Information will result in irreparable harm to the Company, its affiliates, and Members. “Confidential Information” means any written, electronic, oral, visual, or similar, information that Member receives from Company, affiliates, Company Buying Group vendors and other current or former Company Members, including information pertaining to any such person’s businesses, operations, organizations, products, technologies, customers, suppliers, engineering/design specifications and drawings, cost/pricing data, prices, rebates, lists of Members, lists of Company Buying Group vendors, business processes, business data, and strategies, regardless of whether such information is disclosed to the Member or otherwise observed or learned by the Member during the Term of this Agreement, or information marked or identified as “confidential” or “proprietary.” Confidential Information also includes this Membership Agreement and the existence and terms of the Member’s and Company’s discussions.
- General Provisions
- Assignment. Member is not permitted to sell, transfer, or assign this Agreement to any other party without prior written consent from an executive of Company. Company retains the right to sell, transfer, or assign this Agreement to any party upon sixty (60) days prior written notice to Member.
- Waiver. Irrespective of the enforcement of any breach of this Agreement by either Member or Company, waiver of such enforcement shall not be considered as waiver of any subsequent breach hereof.
- Severability. If any section or sections or portions of any section of this Agreement are found to be unenforceable, or illegal in any respect, the balance of the section that is enforceable and the balance of this Agreement shall remain in effect.
- Governing Law and Jurisdiction. This Agreement and the rights of the parties hereunder shall be governed by and construed in accordance with the laws of the State of Arizona including all matters of construction, validity, performance, and enforcement and without giving effect to the principles of conflict of laws. Both parties expressly consent to the jurisdiction of the state and federal courts located in Maricopa County, Arizona. The parties further agree that the exclusive venue for the resolution of any dispute relating to the subject matter of this Agreement shall be in the state and federal courts located in Maricopa County, Arizona.
- Section Headings. The section headings in this Agreement are for reference and convenience only and shall not limit or define the terms of this Agreement.
- Successors. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
- Entire Agreement. This Agreement and the Appendices attached hereto constitute the entire agreement between the parties relating to the subject matter hereof and supersedes any prior agreement or understandings between the two parties. This Agreement may not be modified or amended unless such modification or amendment is agreed to by both parties in writing.
- Other Affinity Group Programs. Notwithstanding the Section 12.g. “Entire Agreement” integrations clause, above, Company and Member acknowledge that the parties may enter into additional, separate Membership Agreements relating to other or additional areas of the residential home service and commercial services industry, and that Company and Member may maintain more than one such affinity group membership agreement at the same time, and according to the terms of each respective membership agreement for products and services in each respective area of the residential home service and commercial services industry.
- Legal Fees. If a party breaches or is attempting to breach this Agreement and the other party asserts or defends its rights with or without legal action, the prevailing party shall be entitled to collect reasonable costs including legal costs and attorney fees from the other party.
- Insurance. Member shall maintain insurance sufficient for its operations and consistent with industry best practices, and shall supply evidence to Company of such insurance, including amounts of coverage, upon written request by Company.
- Compliant with Laws and Licensing. At all times during the Term of this Agreement, Member shall operate in compliance with all applicable laws. At all times during the Term of this Agreement, Member shall maintain any and all licensing required sufficient for its operations and consistent with industry best practices, and shall timely obtain any and all permits, certificates, or similar, necessary for the conduct of the business of Member.
- Indemnification. To the fullest extent permitted by law, Member shall defend, indemnify and hold Company, its affiliates, and Members harmless from and against any and all claims, actions, damages, expenses (including reasonable attorney fees), losses or liabilities incurred by or asserted against Company or its affiliates for injury (including death) to persons or damage or destruction to property and any and all fees, costs or penalties incurred by Company or its affiliates, to the extent that such claims, actions, damages, expenses, losses, liabilities, fees, costs or penalties are caused by or arise out of Member’s negligence or any breach of its obligations under this Agreement.
- Survival of Certain Terms. The confidentiality, insurance and indemnification obligations, and other post-termination obligations, as set forth in this Agreement, shall survive and continue in full force notwithstanding any termination or expiration of the Agreement, and shall continue until they are satisfied or by their nature expire. By way of example only, the insurance and indemnification obligations of Member shall continue until the expiration of all applicable statutes of limitation as to any services, equipment, and products purchased by Member pursuant to the Agreement, regardless of whether or not Member and Company, its affiliates, and/or other Members are then currently conducting business.
- Notices. All notices required or permitted to be given under this Agreement shall be in writing and must be sent by U.S. Mail and electronic mail. Notices shall be sent to:
Name: Freedom For the Trades, LLC Name:
Address: 3230 E Broadway Road Address: Street
Suite B115 City, State zip
Phoenix, AZ 85040
IN WITNESS WHEREOF, as demonstrated by signatures of both parties below, the parties hereto, by their duly authorized representatives and their respective signatures have executed and delivered this Agreement as of “Effective Date” referenced in the first paragraph of this Agreement.